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  1. #1
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    DDB Half Year Convention (2003)

    Does anyone have any experience with calculating depreciation using the double declining balance method, half year convention method? Excel has a formula to calculate the double declining balance; however, it doesn't appear to automatically factor in a convention such as half year which takes half of a years depreciation in year 1 and another half in the last year...


  2. #2
    WS Lounge VIP sdckapr's Avatar
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    Jul 2002
    Pittsburgh, Pennsylvania, USA
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    Re: DDB Half Year Convention (2003)

    <P ID="edit" class=small>(Edited by sdckapr on 28-Jul-07 06:31. added PS)</P>I am not an accountant but a chemist and so I would check the logic with some sample values. But does this do what you want?


    <pre>Option Explicit
    Function DDBDepHYC(dCost As Double, iLife As Integer, iPeriod As Integer)
    Dim dDep As Double
    Dim dBase As Double
    Dim dFactor As Double
    Dim iUpper As Integer
    Dim i As Integer

    If iLife < 1 Or iPeriod < 1 Or _
    (iLife + 1) < iPeriod Then
    DDBDepHYC = CVErr(xlErrNum)
    Exit Function
    End If

    dBase = dCost
    iUpper = iLife
    If iPeriod < iLife Then iUpper = iPeriod
    dFactor = 1 / iLife * 2
    dDep = dCost * dFactor / 2
    For i = 2 To iUpper
    dBase = dBase - dDep
    dDep = dBase * dFactor
    If iPeriod > iLife Then
    dBase = dBase - dDep
    dDep = dBase * dFactor / 2
    End If
    DDBDepHYC = dDep
    End Function</pre>

    PS the source I used (some Example calculations) indicate that the 2nd "half-year" is not taken during the "last year" but the year after the last year. So if the expected life is 3 years, the 2nd "half-year" is taken in year 4 (year1 and year4 would be half-years) and this is the logic I used.

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